Investments

The aggregate values of investment securities at June 30, 2013, December 31, 2012, and June 30, 2012, along with unrealized gains and losses determined on an individual security basis are as follows:



	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
	(dollars in thousands)
Investment securities available for sale
June 30, 2013
U. S. Treasury	$	598,625	$	248	$	207	$	598,666
Government agency	2,725,227		1,531		5,379		2,721,379
Mortgage-backed securities	1,866,204		4,931		27,812		1,843,323
Equity securities	543		20,050		—		20,593
State, county and municipal	186		1		—		187
Other	850		1		23		828
Total investment securities available for sale	$	5,191,635	$	26,762	$	33,421	$	5,184,976
December 31, 2012
U. S. Treasury	$	823,241	$	403	$	12	$	823,632
Government agency	3,052,040		3,501		337		3,055,204
Mortgage-backed securities	1,315,211		14,787		341		1,329,657
Equity securities	543		15,822		—		16,365
State, county and municipal	546		4		—		550
Other	838		—		18		820
Total investment securities available for sale	$	5,192,419	$	34,517	$	708	$	5,226,228
June 30, 2012
U. S. Treasury	$	878,692	$	149	$	156	$	878,685
Government agency	2,976,079		2,684		565		2,978,198
Corporate bonds	49,987		459		—		50,446
Mortgage-backed securities	699,468		9,022		845		707,645
Equity securities	841		17,397		—		18,238
State, county and municipal	1,026		10		—		1,036
Total investment securities available for sale	$	4,606,093	$	29,721	$	1,566	$	4,634,248
Investment securities held to maturity
June 30, 2013
Mortgage-backed securities	$	1,130	$	97	$	27	$	1,200
December 31, 2012
Mortgage-backed securities	$	1,342	$	133	$	27	$	1,448
June 30, 2012
Mortgage-backed securities	$	1,578	$	163	$	27	$	1,714

Investments in mortgage-backed securities primarily represent securities issued by the Government National Mortgage Association, Federal National Mortgage Association and Federal Home Loan Mortgage Corporation.

Investments in corporate bonds represent debt securities issued by various financial institutions under the Temporary Liquidity Guarantee Program. These debt obligations were issued with the full faith and credit of the United States of America. The guarantee for these securities is triggered when an issuer defaults on a scheduled payment.

The following table provides the expected maturity distribution for mortgage-backed securities and the contractual maturity distribution of other investment securities as of the dates indicated. Callable securities are assumed to mature on their earliest call date.



	June 30, 2013				December 31, 2012				June 30, 2012
	Cost		Fair value		Cost		Fair value		Cost		Fair value
	(dollars in thousands)
Investment securities available for sale
Maturing in:
One year or less	$	2,139,800	$	2,137,724	$	2,288,556	$	2,289,859	$	2,424,304	$	2,425,612
One through five years	2,255,416		2,243,828		2,323,222		2,329,207		1,953,001		1,954,357
Five through 10 years	337,666		331,321		194,398		196,371		71,914		72,533
Over 10 years	458,210		451,510		385,700		394,426		156,033		163,508
Equity securities	543		20,593		543		16,365		841		18,238
Total investment securities available for sale	$	5,191,635	$	5,184,976	$	5,192,419	$	5,226,228	$	4,606,093	$	4,634,248
Investment securities held to maturity
Maturing in:
One through five years	$	1,040	$	1,074	$	1,242	$	1,309	$	1,470	$	1,568
Five through 10 years	14		6		18		11		4		4
Over 10 years	76		120		82		128		104		142
Total investment securities held to maturity	$	1,130	$	1,200	$	1,342	$	1,448	$	1,578	$	1,714

For each period presented, securities gains (losses) include the following:



	Three months ended June 30					Six months ended June 30
	2013		2012			2013		2012
	(dollars in thousands)
Gross gains on sales of investment securities available for sale	$	—	$	5		$	—	$	5
Gross losses on sales of investment securities available for sale	—		(2		)	—		(2		)
Other than temporary impairment loss on equity securities	—		—			—		(45		)
Total securities gains (losses)	$	—	$	3		$	—	$	(42	)

The following table provides information regarding securities with unrealized losses as of June 30, 2013, December 31, 2012, and June 30, 2012:



	Less than 12 months				12 months or more				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(dollars in thousands)
June 30, 2013
Investment securities available for sale:
U. S. Treasury	$	76,846	$	207	$	—	$	—	$	76,846	$	207
Government agency	1,656,424		5,379		—		—		1,656,424		5,379
Mortgage-backed securities	1,481,083		26,961		31,766		851		1,512,849		27,812
Other	828		23		—		—		828		23
Total	$	3,215,181	$	32,570	$	31,766	$	851	$	3,246,947	$	33,421
Investment securities held to maturity:
Mortgage-backed securities	$	—	$	—	$	15	$	27	$	15	$	27
December 31, 2012
Investment securities available for sale:
U. S. Treasury	$	120,045	$	12	$	—	$	—	$	120,045	$	12
Government agency	407,498		337		—		—		407,498		337
Mortgage-backed securities	135,880		214		9,433		127		145,313		341
Other	820		18		—		—		820		18
Total	$	664,243	$	581	$	9,433	$	127	$	673,676	$	708
Investment securities held to maturity:
Mortgage-backed securities	$	—	$	—	$	17	$	27	$	17	$	27
June 30, 2012
Investment securities available for sale:
U.S. Treasury	$	528,579	$	156	$	—	$	—	$	528,579	$	156
Government agency	818,772		565		—		—		818,772		565
Mortgage-backed securities	292,053		808		1,668		37		293,721		845
State, county and municipal	—		—		10		—		10		—
Total	$	1,639,404	$	1,529	$	1,678	$	37	$	1,641,082	$	1,566
Investment securities held to maturity:
Mortgage-backed securities	$	—	$	—	$	19	$	27	$	19	$	27

Investment securities with an aggregate fair value of $31,781 have had continuous unrealized losses for more than 12 months as of June 30, 2013, with an aggregate unrealized loss of $878. These 31 investments are mortgage-backed securities. None of the unrealized losses identified as of June 30, 2013, December 31, 2012, or June 30, 2012, relate to the marketability of the securities or the issuer’s ability to honor redemption obligations. For all periods presented, BancShares had the ability and intent to retain these securities for a period of time sufficient to recover all unrealized losses. Therefore, none of the securities were deemed to be other than temporarily impaired.

Investment securities having an aggregate carrying value of $2,425,876 at June 30, 2013, $2,351,072 at December 31, 2012, and $2,432,638 at June 30, 2012, were pledged as collateral to secure public funds on deposit and certain short-term borrowings, and for other purposes as required by law.